When it comes to agencies, brands care more about cost than transparency

Digiday 12 Feb 2019 05:01

Price, not transparency or partnerships, remains the priority for clients when it comes to their agencies.

Last year, agencies pitching for the $1.7 billion global ad account for GlaxoSmithKline were asked to make upfront guarantees on the cost of media, despite it being widely acknowledged that those guarantees can’t be made for digital media, according to an executive who was on one of the pitch teams. Most, of course, complied.

The pitch had gone on for six months and was managed and audited by ID Comms and Ebiquity. It gradually morphed into negotiations over cost savings once the procurement team took over. Before that happened, GSK’s marketers had scrutinized each agency’s operating model and probed how they would provide full transparency into the money made on the media bought.

But the longer those discussions went on, fewer business KPIs and strategic relationships came up. Finally, agency executives found themselves in a corporate box overlooking a rugby pitch, giving GSK procurement team an overview of the savings they could make, said the agency executive.